The SNB holds at 0% as energy lifts Swiss inflation to 0.8%
Victoria Shinder2 min readThe Swiss National Bank left its policy rate unchanged at 0% on 24 September. Banks' sight deposits at the SNB continue to be remunerated at the policy rate up to a threshold, with the discount on balances above it unchanged at 0.25 percentage points, and the SNB repeated that it is willing to be active in the foreign exchange market as necessary.
Swiss inflation has edged up, from 0.6% in May to 0.8% in August. The SNB attributes the rise to goods prices, which turned positive in August for the first time since May 2024, driven mainly by oil products. Its conditional inflation forecast, which assumes the policy rate stays at 0% throughout, now shows inflation rising a little further in the fourth quarter and easing through 2027 as energy prices come off, before edging up again. The annual averages are 0.7% for 2026, 0.8% for 2027 and 0.8% for 2028 - higher than three months ago in the short term because of oil, and slightly higher in the medium term partly because of the weaker franc. The whole path stays within the range the SNB defines as price stability.
On activity, Swiss GDP grew exceptionally strongly in the second quarter, although the SNB says an unusually robust chemicals and pharmaceuticals performance overstated the underlying momentum; even without it, growth was solid. Capacity utilisation was below average and unemployment rose through early summer. The Bank expects 1.5% to 2% growth this year and around 1.5% in 2027. It names the Middle East as the main source of uncertainty, noting that a larger energy shock would push inflation up and growth down at the same time, and records that policy rates have been raised in both the euro area and the United States.
What it means
The decision is a statement about the franc as much as about rates. With the ECB and the Fed both tightening and the SNB at zero, the interest-rate gap to the franc has widened, and the SNB now names the franc's weakening as one of the reasons its own medium-term inflation forecast rose. That is the opposite of its usual problem: for years the concern was a franc too strong for Swiss inflation to reach even 1%.
The wording on intervention is unchanged, and it is deliberately two-sided. For readers tracking EUR/CHF and USD/CHF, the useful markers are the SNB's quarterly intervention data and the next assessment in December, not today's statement, which commits to nothing beyond the current setting.